Rebuilding Trust In Insurance Relationships

A time was, nearly fifty (50) years ago, when
the working class in Nigeria trusted (YES, TRUSTED) the insurance companies and
their agents! Unbelievable? BELIEVE it.

It was the time that trust existed in huge
measure in our financial transactions, savings was a culture and credit was
part of our trade pattern. Policyholders were mostly 8am to 3.30pm workers who
paid their premiums by Standing Orders given to their banks especially for
individual Life policies. Being an insurance agent at the time was a very
envious career as they spent their earnings (commissions) on common symbols of
achievement including automobiles and wears. Everyone knew an insurance agent
from a mile!

Insurance companies and the agents were
operating in an environment where trust swelled with little discourse. Our
nation and leaders had the "trust environment" similarly enjoyed by
all, until we began to experience the effect of the very independence we had
got as a country. Principally, we began to fight for space as the spirit of
independence transcended the national level drilling down to every facet of our
lives.

Losing The Trust

In insurance, the professionally trained
brokers arrived to take space from the insurance agents who were merely trained
to follow a script then pick up standing orders and payments either in cash and
cheques. Similarly, insurance professionals emerged to conduct the business
based on principles that were least understood by untrained but passionate
workers within the insurance industry. There was thus an era when the insurance
agents began to lose confidence in the emergent "insurance system"
and unsure of how they will end, became corruptly reliant on the premiums paid
by policyholders for sustaining their lifestyles. Insurance companies were no
longer receiving premiums as at when due, policyholders stopped seeing their
agents and, upon approaching their insurers, heard horrifying stories from
non-receipt of premiums paid to agents to resultant denial of their claims. Bad
stories sprint, and the insurance agents who had been well known to everyone
suddenly went "underground". Stories of insurance agents have only
been repeated generation after generation till date.

Sales of individual insurance policies
suffered a major blow and only a few insurers could be trusted by career civil
servants and other workers in the formal and well structured environments.
Today, baby boomers speak about the bad experiences of their fathers who gave
those standing orders to the hearing of their children!

Now, it is easy to understand why the
insurance industry in Nigeria today gets over 80 percent of its Gross Written
Premium from governments and companies, often paying little attention to
individuals.

Somewhat, the current recapitalization
announced by the National Insurance Commission (NAICOM) has been associated
with strengthening the position of some insurers to do more of the big ticket
businesses while the market for individual policyholders might remain
potentially open.

Regaining The Trust Requires Three (3)
Re-Building Blocks

1. Communication

Increasingly, discerning members of the
public demand for more awareness campaigns, education and enlightenment by
insurance companies and the regulator. While this may sound pretty simple to
communication experts, it does seem from what we see regarding the materials
that insurance companies have pushed out, that there is a gap between what the
public seeks and what we have on offer.

Commonly, the current campaigns we see are
those inviting members of the public to BUY insurance then some go on to state
the importance of insurance. Are these campaigns oblivious of the generational
information shared or unmindful of the pains caused to those who had (have)
claims?

Campaigns that border on awareness, education
and enlightenment of persons who do not know or have mixed feelings ought to be
more deliberate and specific. Can you ignore the fact that there are unpaid
claims and hope that the prospect would also ignore the news making the rounds?

Sometimes, the requirements of the laws are
used in the communication between the buyers and sellers of insurance and it
often happens that the buyers might succumb once but go on to seek short cuts
subsequently.

How was the communication in the years when
TRUST existed?

Thankfully, the base of trust has shifted to
a less human controlled and decentralized technology. This is where the
insurance industry needs to shift to if it must thrive again and regain the
trust of the people. It must change the mindset of waiting to be called and
rather reach out to the public with the right product, right service, right
channel and right atmosphere.

Can you win again and again when you cannot
repeat what you did before to wow your customers?

Let more communication be about making the
members of the public BELIEVE insurance and not BUY insurance!

2. Transparency

By the stipulations of the International
Financial Reporting Standards (IFRS), insurance companies are required to be
even more transparent in their relationships with insurance buyers, however it
does seem the spirit of transparency has not been brought to the insurance
contracts and processes especially when there are claims.

While customers (policyholders) demand to
know what the terms of the contracts are without reading as it is common with
us, insurers are unwilling to display those terms and INSIST that policyholders
MUST read the contracts or policy documents. This is where the issues related
to delayed or denied claims begin.

Some policyholders pay for insurance merely
to meet conditions elsewhere in their business and never bother about claims,
something that many insurers are aware of and atimes, take advantage of.

To be transparent should be a condition
precedent even as expressed by one of the core principles of insurance - utmost
good faith but often it is difficult to say who should go first.

Notwithstanding, technology focused on
insurance has simplified our processes to the extent that a few insurers just
need to DECIDE to be transparent and will get the needed enablement not just to
effectively manage claims in line with the expectations of the insuring public
but also increase share of the market and contribution to the country's Gross Domestic
Product.

3. Collaboration

We are deep in the age of collaboration
especially as the Fourth Industrial Revolution plunges into our lifestyle which
entails bringing our needs much closer. Can insurance afford to miss this
opportunity to partake in the new environment of TRUST?

Entities collaborate for scale and value. The
much you can achieve on your own is multiplied when you collaborate with, not
one but as many parties as possible.

In most cases of succeeding collaborations,
parties are connected by vision, systems and data. The insurance industry in
Nigeria has what it takes to connect, so why is it not connecting and seen to
be connecting indeed?

For example, it is still happening commonly
that people buy cars and drive it off without genuine insurance while the
Nigerian Insurance Industry Database (NIID) platform will have to wait until
the owners of such new cars are "arrested" by insurance agents or
friends that work with insurance companies. Can the NIID platform be twigged to
allow car dealers register their sales and prompt authorized/licensed insurers
to issue genuine insurance contracts?

Alone, it cannot work no matter the campaign
about and around it until you connect with a collaborating party. Will we see
this soon? Hopefully if the discussions between the insurance industry
association and other parties are successful.

Overall, TRUST needs to return for the
insurance industry in Nigeria to resurrect. It is the blood of the insurance
business and while it is difficult to earn it, regaining it is even more
complex but achievable IF insurance professionals can be more customer-centric.

That is where digital insurance excels!

About The
Author

Ekerete Olawoye Gam-Ikon, MNIM,
CPP is a management consultant with specialization in Strategy and
Insurance. He can be reached vide telephone on +234-806-648-1111 and
+234-802-585-0344 or by e-mail videolagamola@gmail.com

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